While six million Algerians live abroad, their money transfers largely bypass official channels. This missed opportunity is costing the country’s economy dearly.
Approximately six million Algerians reside outside the nation’s borders, with nearly five million in France alone. Yet, the money they send back home barely exceeds $1.8 billion annually, according to World Bank data for 2022. This figure is modest compared to the diaspora’s true potential. A study by Professor Mohamed Benzeghioua, published in June 2024, estimates that Algeria loses over $8 billion in potential transfers each year—a “wasted wealth” that could play a decisive role in revitalizing the national economy.
A Stark Contrast with Regional Neighbors
The comparison with Morocco is striking. Morocco’s diaspora, similar in size to Algeria’s, generates nearly $11.4 billion in annual transfers. Even in countries where the Algerian community is well-established, such as Spain or Italy, the amounts sent back remain negligible. In 2022, Algerians in Spain transferred just $52 million, compared to $2.5 billion from Moroccans. In Italy, the figures were $19 million versus $1.49 billion.
This annual loss represents nearly 5% of Algeria’s GDP—equivalent to the combined budgets of the Ministries of Education, Health, Higher Education, and Labor. In other words, these unclaimed funds could single-handedly finance entire sectors of public services.
The Roots of a Structural Deficit
Why is Algeria failing to harness these transfers? Several factors are at play. The first is the gap between the official exchange rate and the parallel market rate, which drives many expatriates to use informal channels that offer better returns.
The second issue is the inadequate presence of Algerian banking infrastructure abroad. With few branches in host countries, Algerian banks do little to facilitate transfers, leaving the field open to unofficial operators.
Another major hurdle is the distrust expatriates feel toward national institutions. A lack of transparency in managing transfers discourages formal remittances. As a result, many Algerians opt for private, informal networks, which evade official statistics and fail to contribute to the broader economy.
An Economic and Strategic Imperative
Between 2012 and 2022, diaspora transfers to Algeria remained below $2.5 billion, peaking at $2.452 billion in 2014 before declining steadily, particularly after the COVID-19 crisis. Despite this drop, these transfers have historically outpaced non-hydrocarbon exports as a share of GDP, making them a strategic resource for the future.
As Algeria seeks to diversify its economy beyond oil and gas, overlooking this stable and potential source of foreign currency seems like a strategic misstep. Reforming the banking framework, improving institutional transparency, and offering targeted incentives could help Algeria tap into this dormant wealth.
A Sleeping Economic Lever
The Algerian diaspora represents an underutilized economic asset. While other Maghreb countries, like Morocco, have turned diaspora transfers into a cornerstone of financial stability, Algeria can no longer afford to ignore this resource. Redirecting informal transfers, rebuilding trust, and modernizing remittance channels are urgent steps that could transform a capital drain into a driver of sustainable development.
